Bayer's New Product Launch will Improve Sales and Profits; Cut Cost by 80 Percent

"India's agriculture economy stressed, banks on new products", said Bayer.  Due to a weak Rabi season Bayer Crop Science, a Biotechnology major is banking on new a business model for growth as it sees India's agriculture economy to be stressed in the near term and the company's bottom line has taken a hit.  

As per the statement of D Narain, vice chairman & managing director and chief executive officer (CEO), Bayer Crop Science Limited, "Adverse weather and drought led to a weaker-than-expected Rabi season. Overall crop economics will remain stressed in the near term and we are convinced about the long-term potential of the market.”

The company incurred a Rs.79.8 crore loss in the March quarter on revenues of Rs.128.8 crore. For the entire financial year 2018-19, the Bayer arm's revenue was Rs.2,685.7 crore, up from Rs.2,749 crore in the previous financial year. The company logged a profit of Rs.237.6 crore in FY19, a decline of 20.8 per cent from Rs.300 crore in FY18. 

Now, it is implementing a new business model and launching new products to improve sales and profits. 

A new product in the vector control segment which Bayer Crop Science is banking on is named as  Aqua K-Othrine,  under it environmental science business. This is the company's first launch in twenty years in the Indian vector control market. Aqua K-Othrine is a water-based insecticide and cuts costs by 80 per cent. Most products in this segment use oil-based diluents such as diesel. 

When asked about Bayer and Monsanto's merger in India, Narain said, “Our focus will be on product innovation, digitalization and partnerships. Based on the anticipated completion of the merger in India, we envisage new market opportunities and operational synergies from the integration with Monsanto.” 

Sources, however, said that the merger is likely to be completed by September end if all expected approvals come in time. 

Bayer CropScience and Monsanto India are listed companies and market regulator Securities and Exchange Board of India's (Sebi) nod is expected before September. 

Monsanto has two unlisted firms in the country. One is Monsanto Holdings and the other Mahyco Monsanto Biotech (MMB) -- a 50:50 joint venture (JV) with Mahyco. In case of a JV merger, the partner company has to be given the right to continue. So, Mahyco’s decision is another condition for the merger to go through.